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COMPLEX SYSTEMS AND CRISES OF ENERGYJohn URRYSociology Department, Lancaster UniversityMarx and Engels: Modern bourgeois society ‘is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells’. CatastrophismThis paper begins by examining a new trend in thinking about the future of societies, the ‘new catastrophism’. I examine how various analysts, scientists and commentators are examining and advocating accounts of various catastrophic futures characterised by an astonishing array of emergent risks. Systems set in place during the industrial period may contain the seeds of their own destruction. There are no guarantees that the increasing prosperity, wealth, movement and connectivity of what is increasingly termed the anthropocene will continue. Some argue that the twentieth century in the rich North was a short and finite period in human history. Its legacy could come to a shuddering halt with the societies of the rich North ‘reversing’ or ‘collapsing’. This idea of collapse was explored in the late 1980s in Tainter’s The Collapse of Complex Societies. He examined how societies become more complex often as a response to short term problems, complexity demands ever greater high quality energy, increased energy produces diminishing returns, and there is growing concatenation of problems which can reinforce each other unexpectedly and unpredictably across domains. Tainter writes that: ‘however much we like to think of ourselves as something special in world history, in fact industrial societies are subject to the same principles that caused earlier societies to collapse’.This analysis of emergent risks is found in many new catastrophist social and scientific texts which examine multiple interdependent processes in environment, economy, climate, food, water and energy. This new catastrophism is developed in Our Final Century, The Party’s Over: Oil, War and the Fate of Industrial Society, The Next World War. Tribes, Cities, Nations, and Ecological Decline, The Revenge of Gaia, The Upside of Down. Catastrophe, Creativity, and the Renewal of Civilization, The Long Emergency: Surviving the Converging Catastrophes of the 21st Century, The Next Catastrophe, Field Notes from a Catastrophe, With Speed and Violence. Why Scientists fear Tipping Points in Climate Change, Winds of Change. Climate, Weather and the Destruction of Civilizations, Meltdown, Global Catastrophes and Trends: The Next Fifty Years, Down to the Wire. Confronting Climate Collapse, World at Risk, Requiem for a Species, The Vanishing Face of Gaia, Living in the End Times. Best selling author Diamond maintains that environmental problems have in the past brought about the ‘collapse’ of societies. Eight environmental factors were responsible: deforestation and habitat destruction; soil problems; water management problems; over-hunting; over-fishing; effects of introduced species on native species; human population growth; and the increased per-capita impact of people. Thus populations grew and stretched natural resources, particularly energy resources, to breaking point, especially when such societies were at the very height of their powers. He suggests that in the twenty first century human-caused climate change, the build-up of toxic chemicals in the environment and energy shortages will produce abrupt decline. This involves increases of global temperatures that make much plant, animal and human life impossible, the running out of oil and gas, the increased lack of resilience of many societies, a global failure of economy and finance, population collapse, increasing resource wars, and huge food shortages. These might be a ‘perfect storm’ analogous to the ‘societal collapse’ experienced by the Roman Empire or the Mayan civilization. Internal contradictions working slowly and imperceptibly over time brought down apparently dominant systems based upon what seemed like the availability and deployment of extensive supplies of energy. Both Marx and Weber had been aware of the significance of energy resources. Marx wrote of the: ’Subjection of nature’s forces to man, machinery, application of chemistry to agriculture and industry, steam navigation, railway, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers’. Weber recognised the finitude of the world’s fossil resources. But during the long twentieth century this resource-dependence came to be forgotten. It seemed that ‘societies’ had been able to spin off and break free from their resources. It was thought there were no finite limits and perverse consequences that flow from using and exploiting the world’s resources and especially fossil fuels. When Bauman for example writes of ‘liquid’ everything, he seemed to regard the social as ‘infinite’, without limits and without costs or consequences, with no resources that are finite and whose effects mean that they might ‘bite back’. And so-called liquid modernity actually depends upon the literal liquid of oil but this is not noticed by Bauman or indeed almost all other social scientists.Systems thinkingThus there is increasing interest in the ways in which previous civilizations collapsed. Many of these analyses stem from the influence of ‘complex systems’ thinking in which small changes can tip large systems over the edge, beyond a threshold so there are ‘runaway’ changes away from systems in equilibrium. The starting notion here is that physical and social worlds are full of change, paradox and contradiction. There are no simple unchanging stable states or states to which there is equilibrium-establishing movement. Physical and social worlds can be characterised through: ‘the strange combination of the unpredictable and the rule-bound that governs so much of our lives’. So there are patterned, regular and rule-bound systems; these rule-bound workings can come to generate various unintended effects; and unpredictable events can disrupt and abruptly transform what appear to be these rule-bound and enduring patterns. The ‘normal’ state then is not one of balance and equilibrium. For example, populations of species can demonstrate extreme unevenness, with populations rapidly rising when introduced into a given area and then almost as rapidly collapsing. Any system is thus ‘complex’. Policies never straightforwardly restore equilibrium, unlike the claims of policy makers. Indeed, actions often generate the opposite or almost the opposite from what is intended. So many decisions intended to generate one outcome, because of the operation of a complex system, generate multiple unintended effects very different from what is planned.Systems thus generally do not move towards equilibrium. Much economics presumes that feedbacks will only be negative and equilibrium-restoring. The equilibrium models dominant in most economic system analyses, especially general equilibrium models, ignore the huge array of positive feedbacks. Positive feedback mechanisms take systems away from equilibrium states. Thus systems should be viewed as dynamic, processual and demonstrating the power of the second law of thermodynamics, that physical and social systems move towards entropy. Systems can be broadly viewed as unpredictable, open rather than closed with energy and matter flowing in and out. Systems are characterised by a lack of proportionality or ‘non-linearity’ between apparent ‘causes’ and ‘effects’. There can be small changes that do bring about big, non-linear system shifts, as well as the converse. But not all changes. Certain systems can be stabilised for long periods. Causation flows from contingent events to general processes, from small causes to large system effects, from historically or geographically remote locations to the general. Systems thus develop through ‘lock-in’ but with only certain small causes being necessary to prompt or tip the initiation of each ‘path’. Systems once established are ‘locked in’ and their patterns and rules survive for long periods even though there appear to be strong forces that ‘should’ have undermined them. Institutions matter a great deal as to how systems develop. a fateful example of this being the ‘steel-and-petroleum’ car system dating from the late nineteenth century but which has so far resisted all attempts to reverse its system dominance. Systems adapt and co-evolve in relationship to each other and hence possible futures are irreducible to single ‘structures’, ‘events’ or ‘processes’ with futures being messy and complicated and difficult simply to re-engineer.Moreover, movement from one state to another can be rapid, with almost no stage in between. These strikingly abrupt transformations are normally known as phase transitions. As a gas is cooled it remains a gas until it suddenly turns into a liquid. This rapidity can also be seen in transformations between each ice age and the periods of relative warmth that occurred in-between. There are only two states, the glacial and the interglacial with no third way in between. Ice core research shows that there was abrupt movement from one state of the earth’s system to the other, sometimes characterised as ‘punctuated equilibria’.The importance of small but potentially fateful changes is increasingly described through black swans which are those rare, unexpected and highly improbable events that can have huge impacts. They are outliers not averages. Black swans are responsible for much economic, social and political change in the world. The most important events are those least predictable. Thus when change happens it may not be gradual but occurs dramatically, at a moment, in a kind of rush. If a system passes a particular threshold, switches or tipping points occur through positive feedback. The system turns over as many climate scientists now fear with minor increases in global temperature provoking out-of-control ‘global heating’ that could occur with ‘speed and violence’. Along with global climate change a number of other system failures are likely. One is the probable decline in the availability of energy and especially oil and gas over the next few decades. Further, the world’s population is growing by about 900 million per decade, the largest absolute increases ever recorded in human history. Rapid population growth in developing countries especially exposes populations to many hazards. The world went urban on May 23rd 2007. Cities consume three-quarters of the world’s energy and are responsible for at least three-quarters of global pollution. Much food production depends upon hydrocarbon fuels to seed and maintain crops, to harvest and process them, to transport them to market partly because of the exceptional food miles that have come to be involved in diets in the rich North. There are likely to be food protests as a result of likely flooding, desertification and generally rising costs, as well as the tendency for ‘rich’ societies to engage in ‘land grabs’. There are also growing insecurities in supplying clean usable water with huge demands from growing populations, especially those in mega-cities that have to both buy and transport, using carbon-based systems, their water from outside. A global temperature increase of 2.1 degrees would expose up to 3 billion people to water shortages. Some commentators now refer to ‘peak ecological water’, only 0.007% of water on Earth being available for human use. Already severe water shortages face one third of the world’s population. Moreover, these systems are increasingly seen as interacting with each other. Homer-Dixon notes: ‘I think the kind of crisis we might see would be a result of systems that are kind of stressed to the max already … societies face crisis when they’re hit by multiple shocks simultaneously or they’re affected by multiple stresses simultaneously’. Human and physical systems exist in states of dynamic tension and are especially vulnerable to dynamic instabilities. Systems may well come to reverberate against each other and generating impacts upon larger systemic changes. It is the simultaneity of converging shifts that create significant changes. Thus resource depletion, climate change and other processes may come to overload a fragile global system, creating the possibility of catastrophic failure.Moreover, states even in rich societies are often unable to cope with crises (New Orleans, Fukushima), with potential oil shortages, droughts, heat waves, extreme weather events, flooding, desertification, highly mobile diseases and the potential forced movement of millions of environmental refugees. States have to deal with such concatenating processes although their tax revenues have been reducing because of the proliferation of offshored tax havens. The social sciences have mostly ignored issues of resources and especially energy, and indeed of the perverse contradictory consequences of use and over-use. The social sciences in a way replicated and reproduced a world where resources and especially energy were more or less free goods and unimportant for deciphering the lineaments of change and development. But that was the twentieth century. Now we are in the new century the world looks different indeed and issues of resource depletion, contestation and collapse will be haunting it in some potentially catastrophic decades to come. Let me try to show some of this through the interconnecting strange systems of oil, money and property.Oil the wheels of societyIt is often said that money makes the world go round as trillions of dollars, euros, yen, yuan and major currencies circulate around the world at dizzying speed. The scale of this predominantly digital movement dwarfs the income and resources available to all individuals, most companies and many countries. But there is another powerful mobile force in the world and that is oil. ?i?ek writes about its origins: ‘Nature is one big catastrophe. Oil, our main source of energy—can you even imagine what kind of ultra-unthinkable ecological catastrophe must have happened on earth in order that we have these reserves of oil?’ Ancient fossilized organic materials settled on the bottom of seas and lakes and were buried. As further layers were laid on top, so intense heat and pressure built up and this caused the organic matter ultimately to change into liquid and gaseous hydrocarbons. The long hydrocarbon chains of oil are in effect ‘preserved sun’ and only the sun exceeds oil in its energy. This was a unique gift but like most gifts it is finite and irreplaceable. This oil is central to ‘western civilisation’. Oil as much as money makes the world go round. It is remarkably versatile, convenient, mobile and for most of the twentieth century exceptionally cheap since it first gushed out of the ground at Spindletop in Texas in 1901. At $100 a barrel the world’s known oil reserves are currently worth $104 trillion or forty times the value of the UK economy.Oil makes fast movement possible. It provides almost all transportation energy in the modern world (at least 95%) powering cars, trucks, planes, ships and some trains. It thus makes possible the mobile lives of friendship, business life, professions and families. Oil also moves components, commodities and food around the world in trucks, planes and vast container ships, as well as oil itself in large tankers. Oil is also an element of most manufactured goods and much packaging and bottling worldwide (95%). It is crucial to at least 95% of food production and distribution for a rising world population through providing power for irrigation, moving food and providing pesticides and fertilisers. Also oil is used for much domestic and office heating especially within oil-rich societies, and is crucial in providing back-up power and lighting. Overall oil generates around a third of all greenhouse gas emissions and is a major category currently increasing across the world. Besides being itself mobile, oil is energy-dense, storage-able, and non-renewable. It was contingent carbon resources and especially ‘oil’ that enabled the ‘west’ to dominate the long highly mobile twentieth century. It was less the Enlightenment or western science or liberalism that secured western civilization. It was its carbon resources and especially the mobile energy resource of oil which generated an exceptional ‘modern, mobile’ civilization based on fast movement. Owen writes how: ‘Oil is liquid civilization’.The west consolidated its power and influence in the world beginning in the US. Cheap plentiful oil was central to American economic, cultural and military power. If the American Dream was experienced by the world’s population, it would take five planets to support it. American production and consumption got there first, because it initiated and monopolised the manufacture of ‘Large Independent Mobile Machines’ or LIMMs. LIMMs carry their own energy source and given the denseness and historic cheapness of oil this was highly efficient generating the ‘addiction to oil’. Globally there are nearly one billion cars and trucks and almost one billion international air journeys a year. The geologist M. King Hubbert who discovered the problem of ‘American peak oil’ in the 1950s noted its problem: ‘you can only use oil once...Soon all the oil is going to be burned’. Many suggestions and prototypes are being developed to produce alternative energy especially nuclear, solar and wind. But these do not replace oil and ‘oil civilization’. The global economy-and-society became utterly locked into upon this one source of mobile power. Moreover, all alternative fuels have a much poorer ratio of energy returned on energy invested, or EROEI. Furthermore, as oil’s price rises there is not necessarily more produced and delivered to the market-place. Currently its supply seems relatively fixed and intermittent rapid increases in price are certain. Moreover, most new socio-technical systems here take a very long time to develop, often decades. An energy transition from one type of energy system to another only happens once a century or so then with utterly momentous consequences. It is huge problem for one resource to be the basis of these modern systems and societies. The future of oil is the future of modern societies set upon their pathway during the twentieth century. This had a dramatic effect in exploiting the earth’s resources. Nye states: ‘We have deployed more energy since 1900 than all of human history before 1900’. The twentieth century used as much energy as the previous hundreds of centuries of recorded human history. And in using those resources to engender fast movement that century generated carbon dioxide emissions that remain in the atmosphere for hundreds of years. The oil exploring, producing and using industries are a huge economic enterprise containing many of the world’s largest and richest companies. This ‘carbon capital’ consists of western-based oil ‘super majors’ (ExxonMobil), state oil companies mainly found in producing countries (Saudi Aramco, the world’s most valuable company), car and truck producing corporations (Toyota as the world’s largest up to 2011), huge engineering and road construction companies (Bechtel), and many corporations providing services to car-drivers and passengers (Holiday Inn, McDonalds). This capital made the mobile twentieth century.Further, finance and oil are intertwined. Oil is speculated upon in financial markets. Its price movements now stem from this speculation as from changes in the supply and demand of oil for transportation and manufacturing. A major Report for Lloyds of London shows how speculation de-stabilises supply and price and further reduces energy security. There are now over seventy five crude oil financial derivatives where there was one fifteen years ago. This Lloyds Report maintains that extensive growth in financial trading in oil makes oil prices higher and more unstable. Oil prices are exceptionally sensitive to even small changes in demand.And according to the Chief Economist of the International Energy Authority the peaking of global oil supplies is not for the future but occurred in 2006. I now show how that peaking has already had major economic and social consequences. The world economic crash of 2007-8 onwards was partly brought about by oil shortages and price increases.Neo-liberalism and indebtednessCrucial here is neo-liberalism which became the dominant global orthodoxy of economic and social policy from around 1980. It moved from its birthplace within the Economics Department at the University of Chicago. Even by 1999 Chicago School alumni included 25 Government Ministers and over a dozen central bank presidents throughout the world.Neo-liberalism is a doctrine and set of practices that asserts the power and importance of private entrepreneurship, private property rights, the freeing of markets and the freeing of trade. These objectives are brought about by deregulating private activities and companies, privatizing previously ‘state’ or ‘collective’ services especially through low taxes, undermining collective powers of workers and professionals, and providing conditions for the private sector to find ever-new sources of profitable activity. Neo-liberalism especially minimises the role of the state, to readdress the balance as it sees between the ‘bad’ state and ‘good’ markets. Neo-liberals hold that states are always inferior to markets in ‘guessing’ what should be done. States are thought of as inherently inefficient and easily corrupted by private interest groups. Markets are presumed ‘natural’ and will move to equilibrium, if unnatural forces or elements do not get in the way. However, states are often important in eliminating ‘unnatural’ forces, destroying sets of rules, regulations and forms of life that slow down economic growth and constrain the private sector. Sometimes that destruction is exercised through violence and attacks upon democratic procedures. The ‘freedom of the market’ is brought about through ‘shock treatment’, the creation of an ‘emergency’ which enables the state to wipe the slate clean and impose free-market solutions. Klein describes how the disaster of Hurricane Katrina in New Orleans in 2005 provided conditions for the large scale privatization of the New Orleans school system. Never let a good crisis go to waste is a neo-liberal mantra. Harvey summarises neo-liberalism as involving ‘accumulation by dispossession’. Peasants are thrown off their land, collective property rights are made private, indigenous rights are stolen and turned into private opportunities, rents are extracted from patents, general knowledge is turned into intellectual ‘property’, the state forces itself to sell off or outsource its collective activities, trade unions are undermined, and financial instruments and flows redistribute income and rights towards finance and away from productive activities.Since 1980 neo-liberalism became the dominant global discourse. It especially involves the light regulation of banks and financial institutions and the resulting trillion dollar growth in financial securitization. The distinction between commercial and investment banking has been undermined with the lowering of lending standards and the proliferation of innovative business models. There was the ‘macho’ domination of financial services and a privileging of competitive individualism implemented through a bonus culture rewarding indebtedness and dangerous risk taking. There has also been the extensive movement offshore of revenues that ought to be taxed and used for providing collective services and benefits onshore. There are around seventy or so secrecy jurisdictions. ‘Offshore is how the world of power now works’. More than half of world trade now passes through tax havens, including much oil revenue. A quarter of all global wealth is held ‘offshore’. Such offshoring is central to the enormous shadow banking system and the overwhelming imbalance between ‘financialization’ and the ‘real economy’. By September 2008 the global value of financial assets was $160 trillion, more than three times world GDP. Finance in the 1990s and early 2000s especially flowed not into manufacturing industry but into many kinds of property. In order for property to get built the private sector often cajoles national or regional states to create and pay for, often through borrowing, related mobility infrastructures such as motorways, high speed rail links and airports. Property development is then undertaken by firms who borrow finance. The properties built are then purchased by buyers who also borrow to make the purchase. Loans are made to property purchasers who could not otherwise be able to buy. Thus there is a speculative funding of highly leveraged new developments that are leased or sold with indebtedness on all sides. Property developments here include suburbs, apartments, second-homes, hotels, leisure complexes, gated communities, sports stadia, office blocks, universities, shopping centres and casinos, all built on the indebtedness of developers, purchasers as well as states. Central here is the speculative intertwining of property and finance involving new forms of ‘finance’. The debts incurred are turned into commodities or ‘securitized’. They are parcelled up, sliced and diced, into financial packages which are sold on, with huge markets developing throughout the world for many of these ‘products’ which presuppose that property can only be worth more. This creates a financially complex ‘house of cards’ resting upon the ‘bet’ that property rises in value. During the 2000s an unsustainable ‘bubble’ of private, corporate and national indebtedness developed especially within the US. Moreover, many new suburbs in the US from the 1980s onwards were built distant from city centres. They were not connected to city centres by mass or public transit. Such Sprawltowns depended upon car travel and hence plentiful cheap oil so newly arriving residents could commute to work and drive about for leisure and social life. Only one-half of US suburbs have any access to public transport and residents are wholly dependent upon car travel and thus upon the price of oil.Much of this suburban housing was ‘sold’ to people with ‘sub-prime’ employment, credit and housing histories, involving new financial ‘innovations’. Although sub-prime housing is known to be ‘central’ in the events that ‘triggered’ the crash of 2007/8, it has not been recognised how sub-prime suburbs were driven to the brink by a problem of mobility, by oil dependence and oil price spikes in the few years beforehand. Even Stiglitz’s dissection of the American ‘mortgage scam’ does not grasp how energy resources can bite back and reverse what seemed at the time irreversible. How did oil reverse what appeared inevitable, that property could only keep going upwards in value?There was cheap oil for much of the period since the early 1980s. The US index of petrol prices was in money terms 134 in 1990 and more or less the same in 2000 (138). The roaring 1990s especially of house price inflation, which ran two and a half times the increase in per capita income for Americans, was based upon the falling real price of petrol. Such petrol prices remained more or less constant in money terms until 2003 (145). Indebtedness in the US in turn fuelled the huge growth in consumption as house prices rose. It became possible to cash in the ‘rising values’ of property especially 2002-4. That money was used to fund further consumer purchases especially of goods manufactured in China and transported to the US in vast container ships. This generated a huge US current account deficit. Many Americans believed that they were really richer as house prices continued to rise and private debt skyrocketed. Also many people were drawn into purchasing housing through very low rates in the first few years of their mortgage but where much higher rates were charged in later years (‘variable rate mortgages’). Writing during 2006, Brenner describes how financial speculation was producing a real estate mania. The total value of residential property in developed economies rose by more than thirty trillion US dollars between 2000 and 2005. This staggering increase was equivalent to 100% of those countries’ combined GDPs at the time. Indebtedness was thus built upon indebtedness. Such intersecting bubbles of asset prices seemed not to be understood by anyone, nor could they be ‘governed’. George Soros, one of the financial ‘masters of this universe’, reports that no one understood the global system that they themselves were creating!Bubbles burstBubbles though burst and they burst most dramatically and painfully as they fill with more and more hot air. The bursting of this bubble first in the US from 2005 onwards and then worldwide had dramatic consequences for the real economy. This is where oil is central. Throughout the twentieth century soaring oil prices generate economic crises. All recent major economic crises bar one have rising oil prices at their core. Murray and former UK Government Chief Scientist King maintain that the events of 2007-8 were not just a credit crunch but an ‘oil-price crunch’.In the middle years of the 2000s global shortages of oil led to a rapid rise in petrol prices worldwide including the US. The US imports two-thirds of its oil and possesses only 3% of global oil reserves. There was a 5-fold increase in ‘real’ oil prices between 2002 and 2008. Over a longer period the price per barrel of oil increased over fourteen times between 1990 and 2007 partly because the world output of oil and related products could not be raised beyond around 85 million barrels a day. Labban maintains that this ‘the oil crisis arrives as a financial crisis’.Moreover, hurricanes Katrina and Rita hit the Louisiana coastline during 2005. These extreme weather events destroyed billions of dollars of gas and oil infrastructures through flooding the Mississippi delta. Other refineries around the world were working to full capacity and could not increase production when these Mississippi refineries were shut down. Rita led to the capsizing of a production platform. Such extreme weather events intersected with the crisis of oil supply. This illustrates the argument that: ‘societies face crisis when they’re hit by multiple shocks simultaneously. These hurricanes were the extreme events that showed the vulnerability of the world’s ‘oil civilization’. Without the capacity to replace Gulf of Mexico supplies, the price of oil skyrocketed. There will be many other occasions when floods or hurricanes or blowouts or revolutions will reduce supply, dramatically increase prices and devastate patterns of life including those living in suburbs built upon ‘easy oil’, easy movement and the presumed rising price of property. These oil shortages were reflected in the US petrol price spiking in the 2000s. It reached 302 in 2007 and a peak of 405 in July 2008. The petrol price peaked 2007-2008. By February 2009 the petrol index was still higher at 186 than it had been in 2000.But many living in new American suburbs were completely locked into cheap petrol and cheap movement. Without it they could have no life. As petrol prices increased, so property owners were forced to reduce their expenditure on housing and other goods and services including that on cars. Hamilton argues that: ‘the oil price increase was one factor pushing home sales and house prices down’ very rapidly. In the heated atmosphere of the bubble: ‘gas [ie petrol] price increases may have been the trigger that broke the expectations of continued growth’. Suddenly it cost more to fill up an SUV’s petrol tank than it cost to buy a week’s grocery.The American housing boom was thus brought to a shuddering halt through the escalating price of petrol in the middle years of the last decade. This increase tipped financially weak households over the financial brink. They could no longer afford the mortgage payments which they anyway could only just manage to pay given their sub-prime standing. Ten thousand homeowners lost their home to foreclosures every day. Millions of Americans received foreclosure notices and tens of billions in real-estate assets were written off as losses by banks. This was a vicious circle. Foreclosures helped accelerate the fall of property values, helping to spur more foreclosures. The losses they created brought the financial system to the brink of collapse in the fall of 2008. The steep recession that followed led to greater homeowner foreclosures, as homeowners who lost their jobs often also lost their homes.Many households thus defaulted on their mortgages, suburbs collapsed with much property for sale, financial institutions around the world were left holding huge amounts of bad debt (albeit rated AAA by the major ratings agencies), some banks went to the wall or were ‘nationalised’, and there was a global recession on an unprecedented scale continuing into 2012. There was a geographical distribution to these patterns. House price falls were the most marked in suburbs rather than in metropolitan cores and they were especially steep in those distant ‘oil-dependent’ suburbs. House price reductions were greatest where there were no alternatives to the car and the highest dependence upon the price and availability of petrol for almost all aspects of life. Households were spending up to 30% of their income on travel. Cheap oil was a necessity. Because of increases in the cost of petrol the value of housing in commuter belts dropped very steeply. Many such suburbs turned into ‘ghostburbs’, full of foreclosures, for sale signs and empty housing. This meant that: ‘households are being made to rethink another cherished American institution – the white picket-fenced suburban dream home’.This all reduced US consumer spending, similar to what happened in 1990-1 during the first Gulf War. This reduction led to multiple defaults as banks realised that they held huge amounts of bad or toxic debt. This produced the escalating collapse of especially investment banks in the US and then around the world which had also ‘invested in’ many American mortgages. This house of financial cards came tumbling down, beginning in these oil-dependent suburbs full of American households who had been sold ‘sub-prime’ mortgages through a vast ‘scam’ according to Stiglitz. There were many consequences of this collapse, including a reduction in the distances Americans (and others) now travel. This was the first downward shift of US mileage for thirty years or so. Such reductions produced a marked decline in car sales with at least 150,000 fewer people being employed in the US motor industry. Global oil production fell by two million barrels per day in 2009, or 2.6%, the largest decline since 1982. Some speculate that this slowdown marks the beginning of the end for ‘oil addiction’ as it collapsed first in these American ‘sub-prime’, oil-dependent suburbs locked in to cheap car-based movement.ConclusionIn the last years of the last century, neo-liberalism ratcheted up the global scale of movement within the global North. Oil enabled this. This travel of people and goods is essential to most social practices that depend upon and reinforce a high carbon society. Much of this high carbon production and consumption was based on indebtedness and on a greatly increasing significance of ‘finance’ within modern economies. Indeed money was increasingly borrowed from the rest of the world especially China so as to fuel this carbon extravaganza for the global rich. But this extravaganza came to a shuddering halt when oil prices increased in the early years of this century. Suburban houses could not be sold especially where they were in far-flung oil-dependent locations. Financial products and institutions were found to be worthless. Easy money, easy credit and easy oil had gone together. And when oil prices hit the roof in these US suburbs then easy money and credit also came to a halt and the presumed upward shift in property prices was shown to be a false dream. The financial house of cards had been built upon cheap oil and cheap mobility. As oil got prohibitively expensive the house of cards collapsed. This story of oil in the US provides a bleak vision of the future as ‘easy oil’ more generally runs out by the middle of this century. The Chief Economist at HSBC Bank maintains that: ‘Even if demand doesn’t increase, there could be as little as 49 years of oil left’. And of course demand is increasing very rapidly especially outside the ‘west’. Elsewhere I show how we have not seen anything yet with collapsing supplies and dramatically rising prices will wreak future devastation around the world in decades to come. Bill Spence, former Vice-president of Shell apocalyptically writes how in the next few decades: ‘Twice the energy with half the carbon dioxide is a challenge for us all’.The twentieth century has left us with an utterly unsustainable civilization based on the mobilities of people and goods requiring this one resource of cheap, plentiful easy oil. Cannot live with oil, cannot live without it, we might conclude. Energy systems and energy crises can bite back with interest. ................
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